State Senate Budget Draft Puts Priority on Business Tax Cuts

San Antonio AllianceUncategorized

The Texas Senate has produced its own first draft of the state budget for 2016-2017, putting its priority on business tax cuts. Under the Senate budget bill, SB 2, as described today by Lt. Gov. Dan Patrick and his appointee as head of the Senate Finance Committee, Republican Jane Nelson of Flower Mound, $4 billion would be devoted to tax cuts–$1 billion in the form of reduced business franchise taxes, $3 billion in reduced property taxes. A substantial share of the latter would go to owners of commercial property. Just to sharpen the Senate’s point that tax cuts are priority number one, the SB 1 label has been reserved for the bill that would carry out the property-tax cuts. Both of these proposed tax cuts would commensurately reduce funding for public education, which according to SB 2 would be made up with $4 billion in other revenue.

While SB 2 also would reportedly double state spending on border security, the second biggest Senate budget priority after tax cuts apparently would be transportation funding, for which SB 2 would redirect $1.2 billion in motor-vehicle sales taxes and a similar amount from gasoline taxes.  Preemptively earmarking these funds for transportation would reduce general funding available for all other purposes.

Meanwhile, formula funding for Texas public schools in this Senate budget would stay stuck at the current level per pupil—leaving our schools $600 per pupil short of the 2008 level of funding from all sources, after adjusting for inflation. The education portion of the budget, according to Sen. Nelson, would increase education funding only in a few selected areas, including $18.4 million for services for students with autism, $100 million for math and reading academies for K-3 teachers, and $25 million for career-readiness courses in middle school.

Neither the Senate nor the House version of the starting-point budget would meet the neglected needs of more than 5.1 million Texas schoolchildren in our public schools, despite the availability of $18 billion more in general revenue than last session, plus another $11 billion in the Rainy Day Fund reserve. Upcoming Hotlines will provide further information on the contents of both the Senate and House first drafts of the budget (the latter found in HB 1, introduced as noted in the Hotline last week).

Governor to Deliver “State of the State” Address on February 17:  The Texas House and Senate have invited new Gov. Greg Abbott to give his first State of the State address on February 17 at 11 am. Gov. Abbott has said he will use the speech to emphasize three priorities:  education, border security, and roads. The Hotline will report on what he has to say.

Another Private-School Voucher Bill Filed in Austin: On January 26 Rep. Rick Miller, Republican of Sugar Land, filed the session’s second private-school voucher bill, HB 895. This one would let businesses fund private-school tuition and get their state business taxes reduced for doing so. The effect of this tax-credit voucher scheme would be to channel to private schools tax revenue that otherwise would go into the state treasury.